The Hindu Business Line : Volatile movement

FRIDAY'S trading activity witnessed volatile movement. Bears gained considerable from the day's trading. The sentiment reading of the tradable counters stands neutral. Bull domination on Monday has the potential to change the sentiment reading to bullish. On the contrary, it is likely to turn bearish.

Nifty futures recommendation: The August contract opened with a bear gap of nine points and immediately registered a freak low of 2256.30. This low has been discarded for the analysis. The August month contract moved within a band of 40 points considering a low of 2280.00. It closed with a gain of seven points over Wednesday's close.

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The long position in the July contract is likely to be closed out at 2312.50. This leaves the trade with a profit of around 60 points. Bullish and bearish entry levels for the August contract are equally poised from the current level.

Stock futures recommendation: The composition of the top-10 tradable counters underwent a change. NTPC gained entry with the exit of REL. The ranking of the list had some changes. Tata Steel moved to the third position followed by Satyam and Polaris. The exit level for the short position in REL is placed at 638.05.

The positions in the expired July contract would be automatically closed-out with the underlying cash market prices. Except for the downtrend in Tata Steel, all the other counters in the list are likely to be under threat. Bears are likely to have opportunity in NTPC, Polaris and Satyam. Buying opportunities are likely to exist in six counters. For Monday, the best is likely to be the selling in Polaris. This counter is in the sideways mode. Bear move on Monday is likely to initiate the downtrend in Polaris.

Cash segment: There were no new entries or exits to the top-10 active counters list. The ranking of the list had few changes. Tata Steel moved to the seventh position followed by Tata Tele and Zee Tele.

Bear move on Monday is likely to terminate most of the uptrend counters in the list. On the other hand, the downtrend in ONGC is likely to be under threat. Selling opportunities are likely to exist in Infosys, Satyam and TCS. A lone buying opportunity is likely to exist in TCS.

The best among the above is likely to be the selling in TCS. Bearish trigger level for this counter is placed within two rupees from the last traded price. Bear pressure on Monday is likely to trigger the downtrend in TCS.

(Note: All price levels refer to the absolute value of the shares traded on the NSE. There is risk of loss in trading.)

The author is a technical analyst and fund management consultant.

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